IKEA Nanjing Store’s Mission Each IKEA branch company needs to define its specific mission within the broader company, which mission is “Create a Better Everyday Life”. Thus, IKEA Nanjing Store might define its mission as, “Establish IKEA Nanjing as the leader in life at home”. IKEA Nanjing Store needs to be two directions: 1. Inspire and stimulate the many Nanjing people’s interest in improving their lives at home through deeply understanding people’s needs, frustrations, and dreams and by using IKEA home furnishing knowledge and competence to provide affordable, relevant and understandable home furnishing solutions.
Achieve this only when their co-workers become competent and highly motivated. The below table forecast the datum analysis of goals and results from fiscal year 2012 to 2015. IKEA Nanjing SWOT Analysis We can use SWOT analysis to evaluate the IKEA store’s marketing, which monitor the external (Opportunity and Threat) and internal (Strengths and Weaknesses) marketing environment. IKEA Nanjing Store needs to monitor key macro-environment forces and significant micro-environment factors that affect its ability to earn profits.
So it tracks trends and important developments and any related opportunities and threats. Opportunity: There is a stable birth rate and population increase rate in Nanjing city. * The income of Nanjing population has been increased at high level. Jiangsu Province is the second largest GDP in China over the past five consecutive years and Nanjing is the capital of Jiangsu Province. * There are a large number of second hand house and old house refresh in Nanjing city. * With the rising house price, the more many people are living in small space trend, the more people need to multifunctional furniture to decorate their small space. * Nanjing people are home lovers and easy to be influenced to take action to improve their home life. To consider environment degradation and keep health life trend, people like to cook in the home, so they want to have a functional and practical, simple and beautiful, easy-to-clean kitchen. * Internet/online as new technology performance can make people not go out for shopping.
* Transportation can bring convenience to the store through expressway, subway and public bus. Threat: * Competition * Huge and increase investment in media and discount, create market noisy. To create big noise in the market to raise talk-of-town, like big event in downtown. The picture as below: Main Competitor strengthens service level. For example: Red star Macalline is the most furniture shopping mall in China. It has one to one and face to face consultant service. * Competitors improve range presentation, use collage display technique. Red star Macalline has a wide range selection, especially for Living room, bedroom and children’s furniture. * Low price perception in competitor home furnishing accessory. Red star Macalline always use price promotion that is purely discount price, and there is different format (Cost from store and dealer), and frequent local activities Share of wallet with other fashion stuff/ New players * Competition in talent market * Insecurity in real estate market. Since 2013, the China government has increased the control of the real estate. By introduced a series of policies and implemented the new tax rules, the purpose is to control the excessive growth of house prices. The IKEA Nanjing Company applies market threat analysis to evaluate their threat to get the conclusion: 1. The macro environment increase keeps slow down. People are more cautious to spend money, care more promotion and price sensitive.
For IKEA, they need to really strengthen the low price image. 2. Overall the real estate market is downturn from Y2012 that will impact sales growth. They need to focus on home renewal needs which will be the growth opportunity. 3. City development plan and big investment on transportation will bring more new visitor to store, push us to define the new primary market area. 4. Start from Y2012, Home furniture market keep downturn according to real-estate market trend. More competitors closed their store/shops. Customers intend to buy things from the brand they trust.
This could be IKEA’s opportunity to gain more market share. 5. Online media consumption increased year after year, especially for electronic commerce, consumer start to purchase Home furniture products are on-line with price attraction and time convenient. IKEA Nanjing Company has not only external environment analysis but also internal environment analysis, which evaluate through Strengths and Weaknesses. Strength: * Home furniture solutions and inspiration * Strong IKEA Culture and value * IKEA range (width and depth/ everything in one roof/ design/functional/coordination…) Brand awareness increased a lot * Catalogue is a unique marketing tool to penetrate PMA (primary market area). For example: Low level community takes a big share of in-store visitor, so Nanjing move a certain amount of middle level community which with low member penetration to PMA low level community with high penetration, so as to make a test if high penetration would bring us more visitors and new visitors. The distribution map: * Generally good shopping environment (family friendly, allow customer test and try, parking free, Smaland, restaurant) * Health FAMILY member pool.
IKEA Nanjing store’s family member’s quantity is up to 400,000. The total population of Nanjing city is 8,000,000. The ratio is high up to 5% by the end of 2012. * IKEA Food (Business unique compared with competitors/ contributes to low price image…) Chicken shashlik 4 pcs for RMB 5 Slice bread + small package jam for RMB 10 Special offer Weakness: * Low price throughout and low price with quality * How to shop * Easy buying process especially for complex furniture * Communication to make customer easy understand service package and buying instruction * Helpful, knowledgeable and available co-workers – 24 hours co-workers high turnover rate over 100% * Managers’ engagement * Succession in key positions * Motivation of experienced co-workers more than 3 years * New management competence * Relevant solutions (what to show and how tell to visitors) * Range relevancy (for example: bed and textile/cooking and eating) * Relevant survey method * ESP performance management * Shopping environment in peak day and summer time From the SWOT analysis, IKEA Nanjing store can find the key business opportunities to develop itself. The main points are : (1) Lowest price and value for money.
Low price means with focusing on low price with function and quality; (2) Be affordable to meet different thick of wallets, be relevant on what to show and how to tell with relevant survey method to deeper understanding local people’s life at home and show it in an easy understanding way in the store; (3) Different expectation: Managers and non-managers have the competence and succession for running business and expansion and meanwhile there are the relevant motivation programs to meet different expectations for managers and non-managers.
Bases for SPT (Segmentation & Position & Target) Consumer Markets Geographic segmentation of IKEA Nanjing store divides the market into geographical units such as Jiangsu Province and Neighboring provinces, Nanjing city and other cities within Jiangsu province, urban and suburbs. For example: Community Classification Criteria Area| Price | After 2004| 2000 – 2004| Before 2000| Urban| <=8000| Middle| Low| Low| | 8000<P<=11000| Middle| Middle| Low| | >11000| High| Middle| Low| Suburbs| <=5700| Middle| Low| Low| | 5700<P<=6700| Middle| Middle| Low| >6700| High| Middle| Low| | PMA | CITY | Low | 4564| 4967| Middle | 461| 663| High | 70| 113| From the above table, the conclusion was that IKEA need focus more on communities than PMA (primary market area). In demographic Segmentation, IKEA divide the market using variables such as age, gender, education, living situation, live situation, income and travel time. From the research analysis, we found the target group profile as below: * Age: 24-35 * Gender: Female is dominant Education: College above * Living situation: Living with children: biggest contribution group to sales Living together: biggest contribution group to visitation * Live situation: Mid-high level communities* * Income : Higher income than average * Travel time: No influences if have needs According to the target group, IKEA has a set of datum compared consumers with visitors and family members. Please see the below tables:
In psychographic segmentation, IKEA buyers are divided into different groups on the basis of psychological, personality traits, lifestyle, or values. * What are buyers’ personality traits? * SIMPLE & GENUINE & STARIGHT FORWARD They are easy open to others, easy to be read and easy to be influenced. * TRADITIONAL & CONSERVATIVE They take long time to accept new, and love it with higher loyalty once accepted. * GOLDEN MIDDLE WAY They reluctant to make instant decision before getting enough information; they follow trend instead of making it. * NON-AGGRESSIVE& ACCOMMADATED
They are influenced by culture from both north and south for a boundary location; they are less ambitious and somehow laidback; they can accept or even love immigrated things. * EMOTIONAL They are sensitive, cherish relationships and need to feel being involved. So they tend to stick to the brands once they have accepted. * THRIFT It’s partially affected by their economy situation, but more by culture. They are seldom impulse buying for them. * What do they love? * STAY AT HOME They like to stay at home watching TV with families rather than social activities. * WINDOW SHOPPING
They usually go shopping without actual needs just as one of leisure activities. * FOOD & COOKING They love to share delicious food information and cooking at home for family or friends. * READING NEWSPAPER Reading newspaper is a part of their life so high readership and subscription rate on newspaper in local market. * TO COPY & FOLLOW They began to be aware the importance of being open to new things to keep up with society. So they love to copy and follow fashion trend. * TO BE SAFE AND STABLE They prefer routine and like life to be stable without big fluctuation.
So they intend to care about durable feature, and have a lasting relationship with products or partners. * TO BE WITH FAMILY AND FRIENDS They prefer spending time with family and friends, on chatting, entertainment and other activities because they can always get supports from family and close friends at hard time. * SPECIAL OFFER They often tempt to buy special offer products, but seldom buy un-necessaries on the spur of the moment * What are their perceptions? * Home, Work and Life Home is the most important place in the world to local consumers, and children are the core of their life.
The best measurement for success is monetary income in jobs, because working is only for making a living. Leisure time and work should be separated more clearly in life. * Brand and Consumption They think the foreign brand is good products with high price. The higher price is the product, the better quality is the product. They think comparing the price is the best way to save money. They have more time, so they don’t think time is not money. They would like to get the recommendation from well-known groups is more
Cite this Ikea Nanjing Store Swot Analysis
Ikea Nanjing Store Swot Analysis. (2016, Oct 30). Retrieved from https://graduateway.com/ikea-nanjing-store-swot-analysis/